Gas strategy reveals plan to weaken carbon targets

Damian Kahya is the Energydesk editor and former foreign, business and energy reporter for the BBC. You can following him on Twitter @damiankahya

License: All rights reserved. Credit: Stuart Yates / Greenpeace

Polar bears probably aren’t big fans of gas power in the UK.

The UK will significantly
weaken its efforts to tackle climate change if the EU continues on its current
trajectory for tackling emissions - according to thegovernment's gas
strategy.

The plan, to be adopted in the
2014 review of the carbon budgets, would allow 37GW of new gas power by 2030,
around 35-40 new plants.

The proposals claim the
reduction would be consistent with an 'emissions intensity' target of 200g/kwh
for the UK power sector.

That target would be four times higher than that recommended by
the government's climate advisors, the Committee on Climate Change (CCC).

Even if the EU improves its
trajectory the plan proposes a central scenario which would involve building
26GW of new plants in a scenario the government suggests is compatible with an
intensity of 100g/kwh, double the recommended level.

The document says that if the
government were to stick to the 50g/kwh limit the CCC says is necessary to meet
our climate targets it would be able to build 19GW of new plants, still a
significant amount.

But the claim is based on an
assumption that the new plants would run just 15% of the time (see table 2B,
page 22) and appears to assume the closure and re-building of 2/3 of our
current gas capacity

Yet in the same projections only last year DECC claimed the UK
only needed 7.5GW of new gas by 2030, with 2/3 of the current fleet remaining
open.

That scenario appears to back by
Poyry and others which provided significantly lower estimates of new gas build.

Change in stance?

The gas strategy document
claims that the government is 'reiterating' its approach that
"decarbonisation trajectories will continue to stay in step with other EU
countries throughout the 2020s."

It lays out three different
options including one which reaches an emissions intensity of 200g/kwh by 2030.

This option is "based on a
trajectory to around 200g CO2/kWh in 2030, which is taken as a proxy for a
scenario in which the 4th Carbon Budget is revised upwards following the 2014
review in line with a continuation of the EU ETS’s current
trajectory.

It goes on to say
"The Government will review progress towards the EU emissions goal in
early 2014. If at that point our domestic commitments place us on a
different emissions trajectory than the EU ETS trajectory agreed by the
EU, we will, as appropriate and consistent with the legal requirements of
the Climate Change Act, revise up our budget to align it with the actual
EU trajectory."

The section suggests that
decarbonisation efforts in the 2020's will be significantly downgraded if the
EU fails to increase its own level of ambition.

Rebuilding plants

Analysts agree that some new gas
capacity is needed especially to replace coal, which is more polluting than gas
and much of which is due to be retired by 2015.

This may take the form of
un-abated gas, or combined heat and power which has a lower emissions
intensity.

Independent experts, includingthe National Grid,
have suggested the UK may need 3-4 new plants by 2020 to maintain system
security. But beyond 2020 the government's original analysis would suggest very
little extra capacity was needed.

This reflects an analysisby Poyry in 2011
forthe Committee on
Climate Change which found that in a high renewables scenario just 2.1GW of new
gas capacity was needed - beyond what was already under construction.

That analysis depends on
significant use of interconnectors and demand management – which the government
is consulting on as part of the energy bill.

As is too often the case Greenpeace wants to have it both ways. Earlier this week it trumpets a report saying offshore wind would be better for the economy than gas. Now, this report actually assumed that the UK needed 36 GW of gas capacity to back up wind in 2030. This is 1 GW less than what DECC's central scenario will result in.

The reason, I presume, that this won't result in 50 g CO2/kwH is that DECC is assuming nuclear power on the grid. I suspect that Greenpeace don't want nuclear power on the grid. In which case it is time for them to get serious and accept the amounts of gas capacity that will be needed in their preferred energy mix.

Robert Wilson above is right. But recognition of the need for nuclear extends beyond DECC... in fact, the scenarios prepared for Greenpeace and WWF by Cambridge Econometrics also assume nuclear power to meet their decarbonisation target. They are based on the Committee on Climate Change '65% renewables' scenario... This has total generation of 460 TWh, of which 300 TWh (65%) is renewables and 100 TWh is nuclear. The CCC say of this scenario:

"To decarbonise to 50 g/kWh this scenario would still require around 12.5 GW of new nuclear and CCS capacity during the 2020s, in addition to the 5 GW added by 2020."

A quick calculation suggests that replacing the nuclear in this scenario with gas CCGT would increase the carbon intensity of the supply mix from 50 to 136 gCO2/kWh. ie. more intensive than DECC's main gas strategy scenario, which of course embraces nuclear as part of the mix.

Maybe more renewables would do the trick? The CCC says of the 65% renewables scenario: "<em>This scenario deploys renewables at close to the maximum feasibly achievable and would require rapid supply chain expansion</em>".

Oddly, the n-word doesn't feature in the Cambridge Econometrics report for Greenpeace/WWF. Why so coy?

Yours etc @Clive_Bates

Cambridge Econometrics: A study into the economics of gas and offshore wind

Robert Wilson: There are a few differences between the Poyry
High Renewables scenario used in the WWF/Greenpeace funded Cambridge
Econometrics report and the DECC central scenario.

One, as you noted in your blog,
is the amount of new build required to meet the total capacity. Poyry have it
as 7.5GW, DECC 26GW. As you observed, this is likely to come down to a
substantial difference in gas plant lifetime assumptions.

The second is total gas
generation. As you note in your blog Poyry assume very high renewables build,
so potentially reducing the need for gas generation. However I haven't got the
twh figures to hand so will check.

There isn't a great difference
between the two scenarios on Nuclear, with both DECC and Poyry assuming around
10-12GW of nuclear capacity on the system by 2030 (this is based on DECC's
latest energy and emissions projections, linked above) . Increased nuclear
capacity would - as you suggest - result in a reduced need for gas capacity on
the system.

You're right therefore that the
difference in carbon intensity between DECC and Poyry doesn't come from a
difference in gas capacity, nor (of course) gas build. It's also correct to say
that were more Nuclear to be built, the carbon intensity would be lower.

Clive bates:

As mentioned to Robert, the
Poyry analysis for the CCC does involve Nuclear. If one were to substitute gas
capacity for nuclear capacity this would definitely increase carbon intensity -
all other things being equal.

Whether that would require
extra gas capacity (rather than generation) is harder to calculate, but again
all else being equal this seems likley.

Though one scenario has been
published there is clearly a need for further analysis on what a decarbonisation scenario for 2030 might look like without Nuclear, but i'll comment further on your next post.

I've now turned on the function
to notify me of comments - but if we do not reply, please just tweet.

Whilst I understand why you
would want to engage with Greenpeace directly on these issues via this blog, it
isn't the role - however I'd be happy to forward any comments on.

Finally, I believe we have made
this offer before, but if either of you would like to either guest post, or
cross post, on Energydesk - that would be great.

Best,

Damian

Editor, Energydesk

By Damian Kahya - 9 December 2012 at 7:20pm

Damian

The central issue here is whether the levels of renewables Greenpeace wants (or FoE, WWF or any other NGO wants) is incompatible with having about 37 GW of gas in 2030. Though you appear to acknowledge that this level of gas may be needed.

a) No interconnectors are in planning (as far as I know). So, we're looking at 3 new interconnectors being built each year in the 2020s. I think this is a scenario that can comfortably labelled fantasist.

b) Which countries are these interconnectors being built to? UK wind speeds are correlated with a lot of neighbouring countries, and back up from wind farms in France, Belgium (certainly Ireland) is quite questionable. And how do we even know that these countries won't simply be burning gas to balance UK wind?

WWF don't appear to have bothered asking these questions. They just assume it will work out.

Until people actually provide a full working out of how interconnection can provide low carbon back up for UK wind, then I think we must assume that the back up is going to come mostly from gas.

By Robert Wilson - 9 December 2012 at 8:30pm

Robert Wilson:

Thanks for your comment. As I said I can't reply for Greenpeace, and am not a Greenpeace spokesperson, though I have brought your comments to their attention and again, I understand why this would be a forum for raising your concerns with their stance, I just apologise that those concerns won't be replied to directly here (though they shall on the GP climate/energy blog).

The article highlights differences in new gas build rather than total capacity. The main driver of this appears to be differences in lifetime assumptions for existing gas plant. NGO's and DECC can legitimately debate over whether replacing old gas with new gas will be good for the climate - because the plants will be more efficient - or risk creating 'carbon lock-in'. It depends largely on the policy environment and investor expectations within which the new build takes place. What is notable (though perhaps not interesting to all) is that there has been a big shift in DECC's plant lifetime expectations.

The second and more significant area of difference between the various DECC numbers, and also between DECC & Poyry is on carbon intensity. DECC's central scenario assumes a carbon intensity of 100g/kwh running it's gas plant at a load factor over over 20%, it's 50g/kwh scenario has a load factor of around 15%, comparable - as you point out - to the Poyry anaylsis. Obviously this is a significant difference from a climate change point of view between these two scenarios. I don't have data on the mix envisaged in the 50g/kwh scenario - if you can find it that'd be great.

Your broader point relates to how one could realistically decarbonise without nuclear and whether such a pathway would require greater gas capacity than the 37GW envisaged by Poyry/DECC. I agree this is an important question on which the data is less developed, as you point out, but it isn't the topic of this particular blog.

However, if you want to write on this subject then let's talk. It is certainly something which I expect will be discussed on these pages and it is especially important not just because of NGO opposition to nuclear build but because of the current uncertainty over investment in the sector.

Best,

Damian

By Damian Kahya - 10 December 2012 at 11:25am

If a scenario uses nuclear you can be pretty sure it is used for baseload or near baseload operation, rather than as available but low-utilisation capacity. That is dictated by its huge capital cost and relatively low operating cost and very low avoidable cost. This is unlike CCGTs, which have economics better suited to mid merit or peaking operation and for providing back up capacity to intermittent renewables (though they also run baseload depending on relative prices of gas, coal, carbon etc). In the CCC '65% renewables' scenario I mentioned, nuclear provides 100 TWh of electrical energy, based on 17.5GW of new-build. Sourcing this from CCGTs instead would significantly increase the electrical carbon intensity above 50g/KWh - my estimate was 136g/KWh, but I'd welcome an alternative estimate from Greenpeace. Maybe there is an alternative to nuclear that isn't CCGTs. Hopefully, all will become clear when we can see a Greenpeace scenario for the full energy mix, consistent with the things the organisation says about each energy technology individually.

By Clive Bates - 10 December 2012 at 12:56pm

The proposals claim the
reduction would be consistent with an 'emissions intensity' target of 200g/kwh
for the UK power sector.

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